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Why does it have to be PayPal specifically? If you have a credit card then just about any registrar will do you fine. If anything, I try to avoid PayPal since they store credit card and personal information. I understand why they do this (ease of use for customers) but I still don't totally trust the concept.

My personal experience with RegisterFly was a bad one. Their support was bad, took weeks to get back to a few emails I sent. and made it imposible to transfer out by locking domains down. Back then locking domains was fairly new feature and was not accessible by the clients.